When you think about retirement villages, what comes to mind? Probably thoughts of a relaxing and carefree life in a place where you can enjoy your golden years. However, what happens if that retirement village suddenly goes bankrupt? In this blog post, we will explore what happens if a retirement village goes bust and what steps retirees can take to protect themselves. 

What happens to the residents 

When a retirement village goes bankrupt, the residents of that village can be left in a very difficult situation. They may find themselves without a home and need to be relocated. It can disrupt long-term residents who have established close relationships with their neighbours. 

The financial impact of a retirement village going bankrupt can also be significant. Most retirement villages are privately owned. This means that they are subject to the same risks as any other business. If a retirement village does not have enough money coming in to cover its expenses, it could go bankrupt. If this happens, the village would be sold to pay off its debts. 

The good news is that an act called the Retirement Villages Act offers some protections in place for retirement village residents. Residents in a bankrupt village have rights above those who hold interests in the assets and properties of the village. This means that the proceeds of the sale of a bankrupt retirement village must be used to pay off any monies that are owed to the former residents first. This includes any fees, deposits, or bonds that were paid in advance. The Act also protects residents from being evicted without notice. This could give residents ample time to find an alternative accommodation. 

Steps residents can take to protect themselves 

There are a few things that retirees can do to protect themselves when their retirement village goes bankrupt. First, they should make sure that they have a written contract with the retirement village. This document will outline what services and amenities the village is responsible for providing, as well as what happens if the village goes bankrupt. In addition, retirees should keep track of their finances and make sure that they have enough money saved up to cover any unexpected expenses. Finally, retirees should stay informed about what is happening with the bankruptcy proceedings and be prepared to take action if necessary.

While it’s quite impossible to know if a retirement village will go bankrupt, being prepared can help retirees weather the storm. By taking some simple precautions and by consulting with an expert before making any decisions, retirees can protect themselves from the financial and emotional impact of a retirement village going bust.